Check Fraud & Scams

Fake check scams are clever ploys designed to steal your money. Avoid becoming a victim by learning how the check scam works and understanding your responsibility for the checks that you deposit in your account. Here are some tips from the FBI and the National Consumer League.

FBI Alert: If you can answer YES to any of the following questions, you could be involved in a fraud or about to be scammed:

Is the CHECK from an item you sold on the Internet, such as a car, boat, jewelry, etc.?

Is the amount of the CHECKmore than the item's selling price?

Did you receive the CHECK via an overnight delivery service?

Is the CHECK drawn on a business or an individual account that is different from the person buying your item or product?

Have you been informed that you were the winner of a LOTTERY, such as Canadian, Australian, El Gordo, or El Mundo, that you did not enter?

Have you been instructed to either "WIRE", "SEND" OR "SHIP" MONEY as soon as possible to a large U.S. city or to another country, such as Canada, England, or Nigeria?

Are you receiving PAY or a COMMISSION for facilitating money transfers through your account?

Did you respond to an email requesting you to CONFIRM, UPDATE OR PROVIDEyour account information?

You can report a suspected fraud to your local FBI office.

From the National Consumer League:

There are many variations of the fake check scam. It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.

Fake check scammers hunt for victims. They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. And they call or send emails or faxes to people randomly, knowing that some will take the bait.

They often claim to be in another country. The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.

They tell you to wire money to them after you’ve deposited the check. If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.

The checks are fake but they look real. In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.

You don’t have to wait long to use the money, but that doesn’t mean the check is good. Under federal law, banks have to make the funds you deposit available quickly – usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce.

You are responsible for the checks you deposit. That’s because you’re in the best position to determine the risk – you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.

There is no legitimate reason for someone who is giving you money to ask you to wire money back. If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.

Don’t deposit it – report it! Report fake check scams to the National Fraud Information Center/Internet Fraud Watch, a service of the nonprofit National Consumers League, at www.fraud.org or (800) 876-7060. That information will be transmitted to the appropriate law enforcement agencies.